For a second consecutive day stocks rallied impressively into the close. However, Friday's trade was light. The major indices all finished higher, with the Russell 2000 leading the way. The small-cap index gained 1.1% yesterday. The S&P MidCap 400 finished a close second, as it posted a 1.0% gain on the session. The Nasdaq, the S&P 500 and the Dow Jones Industrial average rallied by 0.7%, 0.6% and 0.4% respectively.

Turnover fell sharply on Friday. Volume fell by 18% on the Nasdaq and 7% on the NYSE. However, Advancing volume finished the day higher than declining volume by a factor of 2.6 to 1 on the NYSE and 1.6 to 1 on the Nasdaq.

GDX hit its tight stop on Friday and we exited the position. GDX is still exhibiting the characteristics of a good short candidate and we may very well reenter the trade if a setup presents itself.

In the February 3 newsletter we commented, "The Global X Uranium ETF (URA) broke out on massive volume two days ago (02/01/11). A pullback/undercut of the 20-period EMA ($21.50-$21.75 range) on the hourly chart below may provide a long entry trigger for this ETF. We will be following it closely for a possible entry". Since then, URA has pulled back and undercut the 20-period EMA on the hourly chart. A move back above $21.70 may present a buy entry for this ETF. We are placing URA on the watchlist. Trade details are available for our subscribing members in the watchlist segment of the newsletter.

Hourly chart from February 3 newsletter:





The Market Vectors Gaming ETF (BJK) has been consolidating since mid-January above support at $31.80. A volume assisted rally above $32.50 may present a buy trigger for this ETF.



The DB Gold Double Short ETN (DZZ) has been consolidating along its 50-day MA after pulling back from a big breakout move. A rally back above $8.75 could present a buying opportunity for this ETF.



Although divergence continues among various ETF groups, the broad market appears to have repaired itself quite a bit over the past several trading sessions. Most of our short-term technical signals point to another move up for the market.

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.